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Acting Assistant Attorney General Mythili Raman Testifies Before the U.S. House Financial Services Subcommittee on Oversight and Investigations


United States

Chairman McHenry, Ranking Member Green, and distinguished Members of the Subcommittee:  Thank you for inviting the Department of Justice to appear before you today to discuss our efforts to combat financial crime.  I am pleased to be here and am privileged to oversee the important work of the Criminal Division.

The Justice Department is committed to vigorously investigating allegations of wrongdoing at financial institutions and, along with our many law enforcement partners, holding individuals and corporations to account for their conduct. 

Our track record in recent years shows our commitment to pursuing the most challenging and complex financial crime investigations in the country.  Over the last three fiscal years alone, the Department has filed nearly 10,000 financial fraud cases against nearly 14,500 defendants.   These prosecutions have led to stiff prison sentences for many defendants.  Last year, for example, the Criminal Division and the U.S. Attorney’s Office in Houston secured a 110-year sentence for Robert Allen Stanford for orchestrating a 20-year, $7 billion investment fraud scheme – just one of numerous investment fraud schemes the Department has prosecuted in recent years. 

We have been just as aggressive in bringing prosecutions involving the manipulation of the markets, as seen by the extraordinary success of the U.S. Attorney’s Office in Manhattan in an unprecedented string of insider trading cases over the last several years. 

Our prosecutors and agents also continue to doggedly pursue health care fraudsters.  Our Medicare Fraud Strike Force has convicted over 1,000 defendants of felony health care fraud offenses since the Strike Force’s inception, and the average sentence in Strike Force cases is approximately 45 months in prison. 
Our fight against foreign bribery, too, is as robust as it has ever been.  In just the past two months, we have announced charges against 11 individuals – including corporate executives and employees, and one foreign official – in active Foreign Corrupt Practices Act investigations.

Similarly, our investigation of the manipulation at various banks of interbank lending rates, including LIBOR, has had reverberations across the globe.  As detailed in my written statement, the consequences thus far for several multinational banks have been far reaching, ranging from replacement of senior leaders at Barclays, to criminal charges against traders at UBS, to detailed admissions of criminal wrongdoing and the payment of substantial penalties by three global banks, to felony guilty plea agreements by Japanese subsidiaries of UBS and RBS. 

As is evident from this track record, we are deeply committed to holding wrongdoers – whether individuals or business entities – to account for their crimes.  In our investigations of business entities, in particular, we are guided by firmly rooted Department policy, set out in the U.S. Attorneys’ Manual, which requires our prosecutors to consider a number of factors in determining how and whether to bring charges – including the seriousness of the entity’s conduct, the pervasiveness of the wrongdoing, the extent of the entity’s cooperation with our investigation, and the remedial actions taken by the company. 

There has been some discussion in recent months about one of those factors – the potential collateral consequences of charging a corporate entity – and we appreciate your interest in better understanding the extent to which the Department may consider possible collateral consequences of criminal prosecutions against large, complex financial institutions.

The consideration of collateral consequences on innocent third parties, like the other factors we must consider when determining whether and how to proceed against a corporation, has been required by the U.S. Attorneys’ Manual since 2008.  But the basic principles underlying that policy have a much longer history at the Department.  The first Department-wide guidance on this subject was issued in 1999, and those basic principles have been reaffirmed multiple times since then, including in 2003, 2006, and 2008. 

As more fully explained in my written statement, although the factors set forth in the U.S. Attorneys’ Manual, for good reason, inform our prosecutorial decisions, none of those factors, including potential collateral consequences, acts as a bar to prosecution, or has prevented the Justice Department from pursuing investigations and seeking criminal penalties in cases involving large, complex financial institutions.  No individual or institution is immune from prosecution, and we intend to continue our aggressive pursuit of financial fraud with the same strong commitment with which we pursue other criminal matters of national and international significance. 

Thank you for the opportunity to provide the Subcommittee with this overview of our financial fraud enforcement efforts.  I look forward to answering any questions you may have.

Updated September 17, 2014